This presentation is in two parts. The first deals with the present.

Income inequality is higher in the Philippines than in most of its Asian neighbours, and spatial inequality accounts for a fairly large share of it. However, there is little evidence of laboutr market failure since, when properly measured, real wage gaps by skill are modest or absent. Unequal endowments account for most of the urban-rural real income gaps, not wage rates or Todaro adjustments. That is, human capital endowments of workers and households explain the vast majority of the gaps; provincial variables like typhoon incidence, government corruption, school crowding, and access to health facilities matter far less. Workers born in the cities and immigrants to the cities invest more in human capital than do rural workers, but how much of that is due to better human-capital-building infrastructure supply in the cities and how much is due to higher urban demand for that infrastructure? A look at history helps assign importance between the two.

By using census-based provincial HDIs, the second part of the presentation identifies an abrupt trend reversal from regional convergence 1918-1960 to regional divergence 1960-2010, and offers explanations for the reversal favoring human-capital-building infrastructure supply.